Tag: AICPA

The National Society of Accountants Has a Bone to Pick with the AICPA

A couple weeks back the AICPA gave its members the go-ahead to Crtl+C, Crtl+V its letter to the IRS about how certain parts of the proposed tax preparer regulations were a load of crap.

We just assumed that everyone in the accounting biz was on the same page here but boy we’re we wrong. The National Society of Accountants sent this letter to Treasury honcho Geithner stating that they don’t want any tax preparers exempted from obtaining a PTIN (among other complaints):

NSA Letter Regarding CPA Firm Exemption


What’s especially interesting is that the AICPA is not named in this letter once, however they are named specifically in the NSA’s press release:

Now, at the 11th hour, just before the registration process is scheduled to begin, some – including the American Institute of CPAs – are demanding that staff members of ‘CPA firms’ be exempted from the registration requirements. This flies in the face of why this registration program was set up. The point of the new regulations is to ensure that all tax preparers are accountable for their work in preparing returns, and that should include anyone who paid to prepare all or substantially all of a return, no matter where they may work.

The basic tenet here is that big firms will get away with letting the underlings preparing the returns not be held accountable for their (apparently) shoddy work. The NSA’s position is that if every single legit tax professional is registered then they can track down the shitty ones and the IRS can act accordingly. The NSA claims that the “loophole” proposed by the AICPA will let these amateurs skate the testing and registration requirements and thus won’t be serving taxpayers one iota.

On the one hand you might have been totally against the tax preparer regulations from the start but now that they’re unavoidable, the AICPA’s request for exemptions in some cases may burn the unlucky bunch that wouldn’t get to enjoy waiver.

The AICPA Doesn’t Mind If You Copy and Paste Their Letter for the Expressed Purpose of Telling the IRS That the Preparer Regs Suck

The AICPA is following the ABA’s strategy of mass letter sending by urging its members to inundate the IRS with tearful pleas to reconsider the Service’s Tax Preparer Registration Proposal.

The issue is so serious that the Tax Vice President, Edward Karl, went on the Hill today to testify about the AICPA’s concerns, in what had to have been one raucous hearing:

The AICPA has serious concerns that the proposed IRS regulations are an overreach and would place immense burdens on CPA firms, particularly small- and medium-size firms. Further, the AICPA questions whether the IRS has adequately examined the costs that would be imposed on tax preparers and American taxpayers.

The IRS has proposed four broad new requirements for paid tax return preparers including: mandatory registration, application of enforceable ethical standards, competency testing and continuing education requirements. At [today’s] hearing, the IRS specifically requested comments about registration and the fees tax preparers will be charged for newly required personal taxpayer identification numbers, or PTINs.

While the AICPA has consistently supported the IRS’s efforts to increase tax compliance and elevate ethical conduct through the adoption of a registration process for paid tax return preparers, the AICPA does not believe other elements of the policy are fully justifiable or necessary, according to Karl.

The AICPA is urging all of its 360,000 members to contact the IRS about the proposed regulations to express opposition to elements of the plan.

Adrienne urges everyone to do the copy and paste thing ASAP and since there’s no mention of the IRS being anti-form letter, then we’d probably say that it’s safe to proceed with the letter with the AICPA’s language.

That being said, that’s a pretty boring approach and if you can muster the passion of either side of the fair value debate, we suggest you write from the heart.

The AICPA Goes to Bat for Small Business; Requests Repeal of Expanded 1099 Reporting

In these pages last week, we brought up the expanded 1099 reporting requirements that could possibly bury some small busineocumentation. The question remains, how big is this pile? Will it require a shovel to dig out of the pile of paper or a bulldozer?

Based on the AICPA’s letter to the U.S. Senate that made the rounds yesterday, it will require a team of angry Ohioans – all with their own dozer – to unbury small business owners.


Alan Einhorn, the Chair of the AICPA’s Tax Executive Committee wrote the letter and in extremely tactful terms, expresses his discontent, “[W]e believe section 9006 of the Act should be repealed because the provision imposes extremely burdensome information reporting requirements on business taxpayers that cannot be justified in terms of the limited utility such information reports will provide to government.”

Adrienne boils that down in a less tactful manner, “You don’t have to be a CPA to see why this is a completely moronic idea. What happened to paperwork reduction? I love the use of ‘extremely burdensome’ – as most of you probably know, it’s got to be REALLY annoying to get the accountants to bust out the ‘extremely’ in a complaint.”

She makes a good point. Not to get all English-y on you but the adverb “extremely” doesn’t exactly make it a more effective sentence. Alan was clearly going for exaggeration in order to get his point across that this portion of the Patient Protection and Affordable Care Act is the most useless section of the entire act. And for some of you, that’s really saying something.

AICPA Letter to Congress Supporting Repeal of Expanded 1099 Reporting by Businesses

The AICPA Is Jumping on This Audit Committee Trend

“The audit committee is essentially its organization’s financial conscience. The responsibilities have grown demonstrably, and committee members need appropriate guidance to carry out their essential charge. That’s the AICPA’s goal for its first audit committee forum.”

~ Carol Scott, AICPA vice president for business, industry and government thinks it’s about time we got down to business.

AICPA: CFOs Want More Input from Auditors on IT Matters

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

Certified Public Accountants are increasingly being asked to solve information technology problems for clients and prospective clients, according to a survey by the American Institute of Certified Public Accountants.

But that raises a potential conflict of interest of the sort that led the Securities and Exchange Commission to keep auditing and IT consulting separate. The pressure for auditors to help provide IT solutions will persist nonetheless, says the AICPA.


“The tide has really turned this year with the economy and increasing regulations,” said Joel Lanz, co-chair of the AICPA’s Technology Initiatives task force in a prepared statement.

“As small and medium-sized companies increasingly place IT under their chief financial officers, it’s becoming much more of a broad scope of responsibility,” added Ron Box, Lanz’s co-chair.

With a renewed focus on IT-related issues, the survey makes clear that CPAs need to be literate about information technology in order to collaborate effectively with clients and their IT partners.

Data security clearly is driving the new interest, and CPAs believe the issue will persist in importance for years, the survey suggests.

The biggest surprise from the survey, Lanz told CFOZone, is the fact that “CPAs are not only providing guidance on financial issues, but there is an expectation by audit committees that CPAs could advise on different IT governance issues. CPAs are now commenting to audit committees about business operations in addition to pure financial issues.”

It’s not that CPAs are expected to be the technology expert, but the expectation is that the CPA is able to provide business insight and IT guidance which then enables their clients to effectively leverage their technology to enhance the businesses value, he added.

Is this simply recreating the problem that led to the separation post-Enron and WorldCom of audit services from consulting, much of which was IT oriented? There’s the potential for a conflict of interest here, and a slippery slope toward bad audits as result. SEC rules specifically say audit firms cannot provide IT consulting services on matters that relate to financial reporting for the same client. And the audit committee must sign off on other types of consulting services.

Lanz concedes that CPAs will have to be careful. “It is a fine line,” said Janis Parthun, senior technical manager – IT, for AICPA, but she added that CPAs can help companies avoid problem here. “Sometimes audit committees do need some education in these areas and this is where they can reach out to CPAs that have some understanding of IT to give the audit committee options to make the right decision.”

Lanz adds says that the AICPA has helped on this front with some recent guidelines. “Recent standards provide CPAs with specific criteria for when they need to communicate with audit committees, as well as the type of communication required,” he said.

A spokesman for the Securities and Exchange Commission declined to comment on the trend.

Accounting News Roundup: AICPA vs. IRS on Uncertain Tax Positions; Accountants Involved in Haiti Recovery; Taxing Pot Could Yield $400k for D.C. | 06.02.10

AICPA Protests Disclosures of Uncertain Tax Positions [Web CPA]
The AICPA has come out against the IRS’ uncertain tax positions proposal, saying “it should withdraw its proposed rule that would require companies with more than $10 million in total assets to disclose uncertain tax positions on a new schedule.”

The AICPA is not so hot on the idea of the IRS wading into the financial reporting waters, “We understand that the UTP proposal does not change the underlying rules for financial reporting, but believe overlaying a tax disclosure construct on the financial reporting system introduces a dynamic which could work at cross purposes with the original and fundamental purpose of the financial reporting rules.”


Haitian recovery needs accountants [Accountancy Age]
Nearly five months after the Earthquake in Haiti things are recovering slowly. Financial records for the government and private business have had two considerably different experiences:

[T]he finance ministry’s financial controls and systems are now being restored after its headquarters were destroyed. The World Bank has helped this critical process, placing accounting experts with the ministry.

As for the private sector, Laforest said many companies’ financial systems had survived thanks to accounting software packages, whose data had been uploaded to cloud computing remote data sumps on the internet. But bills, receipts and other paper records vital for making tax returns had been lost where offices collapsed.

And creating proper controls around the donations process has been crucial for organizing those funds. According to one volunteer, “[W]ithout proper controls, the money that you and your friends and your government have given might as well be left in a big bucket in the middle of the market with a sign saying ‘biggest at the front, smallest at the back.’”

Pot could bring in $400K for D.C. [Post Now/WaPo]
The District’s Council is expected to vote on June 15th on a provision that would levy a 6% sales tax on ganj sold there. At an approximate price of $350 an ounce, each bag would yield $21 for DC and would be expected to raise $400k in the next 5 years.

Tweedie replacement must juggle dual roles [Accountancy Age]
The candidates for the IASB chair are dwindling but most people seem to agree that having the role split into “Chair” and “CEO” roles might benefit the Board. “Richard Sexton, head of audit at PwC, suggested the role should be split.” And BDO’s sometime blogger and International CEO Jeremy Newman chimes in, “It’s unrealistic to expect one person to cover both.”

Also, whoever fills the big chair can’t be a über double-entry geek or just a crafty political type to heavy one way or the other. Most think that it needs to be a balance of both, although the preference of which is more important is debatable, including one Deloitte partner’s point of view, “If you don’t understand the accounting, you won’t be able to do the diplomacy around the debate,” versus Grant Thornton, “At this stage in the IASB’s life, we would place political awareness ahead of technical [knowledge] for the chair, but of course the chair must be technically astute.”

In Other Words, The Estate Tax Debate Will Continue to Drag On

“The debate becomes what rate to apply, and there’s the Republican view and the Democratic view, and what level of transfer exemption should be there. There are two different camps on that. I think historically that would be ripe for sort of compromising down the middle, but unfortunately, that’s not the political environment that exists right now.”

~ AICPA President and CEO Barry Melancon remains optimistic that something will get done.

Accounting News Roundup: Grant Thornton Moves DC Office; CPAs Are Less Clueless on IFRS; The IRS Wins Twice | 05.25.10

Grant Thornton moves D.C. office [Washington Business Journal]
GT DC is moving from its cushy confines of 19,450-square-feet at 1900 M St. NW to 15,190-square-feet at 1250 Connecticut Ave. NW.

Mary Moore Hamrick, the company’s national managing principal of public policy thinks this move is crucial saying, “Grant Thornton’s public policy group is taking a more proactive role in shaping the dialogue on accounting issues. This move will support the public policy group’s expansion as we seek to do our part in restoring confidence in the capital markets.” Better feng shui probably.


AICPA Survey Shows US CPAs Gaining in Awareness of International Financial Reporting Standards [AICPA Press Release]
CPAs are less clueless on IFRS, sayeth the AICPA:

The latest AICPA tracking survey shows a sustained shift toward greater awareness of International Financial Reporting Standards (IFRS) among U.S. accountants. Nearly half, 47 percent, of CPAs in the survey conducted April 20 to May 7 said that they already have basic knowledge of IFRS, an advancement from 39 percent who had basic knowledge in October 2008. At the same time, there has been a continuing decline in the number of CPAs who say they have no knowledge of IFRS; 16 percent in the latest survey, down from 30 percent in October 2008.

U.S. Supreme Court upholds IRS power in tax case [Reuters]
Those super secret corporate legal documents that discuss contingent liabilities? The IRS may be able to request them whenever they like, as the Supreme Court upheld a First Circuit ruling by denying certiorarit in the case.

In U.S. v. Textron, Inc., the company claimed that such documentation was privileged. The First Circuit disagreed:

[I]n its ruling against Textron, set a new test, under which every party in commercial litigation whose opponents file financial statements with contingent liabilities for litigation will be able to obtain documents detailing such exposure, according to Douglas Stransky, an attorney at Sullivan and Worchester in Boston who represents corporate clients.

“The First Circuit’s decision has eviscerated the work product protection that exists to protect exactly the type of attorney analysis that was present in this case,” he said. “It’s surprising that the Supreme Court did not recognize this.”

Florida Keys inmate pleads guilty in IRS scam [Miami Herald]
Shawn Clarke, an inmate at a Florida prison, pleaded guilty to conspiracy yesterday as the ringleader to a tax fraud scam in which he requested bogus refunds from the IRS in the amount of $115,000. It wasn’t exactly a complicated scam, as the inmates and their family members submitted 1040EZ forms along with Form 4852 to request the refunds, all for around $5,000.

Clarke was convinced that this was the best idea ever, allegedly saying, “I’m through with the street crime. I’m strictly white collar from now on. I love the IRS.” He’s looking at an additional 10 years.

What the AICPA’s New Website Means for CPA Exam Candidates

The short answer: not really anything but I spent 3 years slogging through that last design and can I tell the AICPA that it was absolutely awful? I’m not bitter or anything but I can only imagine what candidates felt like trying to find even the simplest bit of information.


They tell you before you take on the CPA exam to check out cpa-exam.org and run the tutorial before you actually sit down for a section so you can familiarize yourself with the computerized format. CPA Review providers cannot duplicate exam content or the environment exactly, as it is proprietary information, so simulations are a must-do and navigating is a skill you’ll pick up along the way if you don’t already have it. So as long as you’ve already done that, your next stop is the redesigned AICPA website.

Watch a PPT on becoming a CPA, learn about joining the AICPA as a candidate member, or check out their many resources on career options in the accounting industry. You’ve seen Start Here Go Places (an AICPA project that markets the exciting career of accounting to high schoolers and beyond), I don’t need to point you to that.

The AICPA is hot on marketing and excellent at it, even if they do make a poor choice every now and then (Benjamin Bankes, I’m talking about you, dude), so it’s no surprise that they are trying to seduce undecided college students and disgruntled finance professionals looking to switch professions. Things are slightly better in accounting so it isn’t all slick marketing, but I digress.

You can check licensure requirements for your state and even find out how much “average” accountants make. I encourage all of you considering accounting as a career to doublecheck those numbers with Going Concern salary threads.

Anyway.

Overall it’s an improvement and hopefully aggregating this information on the AICPA’s website will make it easier for candidates to find what they need. What do you think?

(Remember also that the ultimate authority on your CPA exam experience is your state board, NASBA, or CPA exam administrating company (like Washington), not the AICPA. Always check with your state board et al. before filing applications or forms if you are unsure on any CPA exam information you read.)

Adrienne Gonzalez is a Going Concern contributor and former CPA wrangler. You can see more of her posts here and all posts on the CPA Exam here.

The “Red Flags” Rule is Still Useless for CPAs

In more government bureaucracy news, the FTC is granting a reprieve to CPAs when it comes to a new law that deals with identity theft, one which some CPAs say is useless given professional responsibility.

The new FTC rules requires businesses to “develop and implement written identity theft prevention programs to help identify, detect and respond to patterns, practices or specific activities -– known as ‘red flags’ — that could indicate identity theft.” The problem with that, of course, is that the AICPA Code of Professional Conduct already deals with the issue of identity theft in that there is an iron-clad confidentiality rule by which all CPAs must abide. Seems simple, right?


The US District Court has ordered an FTC delay of the rule for AICPA members in public practice, says the Maryland Association of CPAs. Barry Melancon, AICPA President said in 2009 when the AICPA filed a lawsuit against the FTC, “We do not believe that there is any reasonably foreseeable risk of identity theft when CPA clients are billed for services rendered. As trusted advisors, CPAs are personally acquainted with their clients and already adhere to strict privacy requirements governing identifying information.”

Don’t take it personal, Barry, the FTC is just trying to do its job, even if that means overreaching its authority and attempting to place restrictions on professionals who already go above and beyond the intent of the FTC on a daily basis.

In the meantime – and just in case the rule cannot be delayed indefinitely (as is, implementation has been put off until June 1, 2010) – the AICPA has some guidance for CPAs on creating an identity theft prevention program. Keep in mind the new requirements, if implemented, only affect CPAs who bill their clients on a monthly or revolving basis as it is meant to place additional controls in client billing.

The American Bar Association is also fighting the rule.

Another ‘Red Flags’ delay: CPAs get 90 more days [CPA Success]

Accounting News Roundup: Improving the External Audit; Another Accounting Firm Bolts Greensboro, NC; AICPA Opposes Nonsigning Tax Preparer Rule | 04.27.10

Weighing the Worth of an External Audit [Compliance Week]
Does the external audit still have value? Some people have questioned that notion. Despite that grave assessment, there are still many that believe that the external audit has value. However, most have no illusions about the challenges before the profession.

Colleen Cunningham has a post up at Compliance Week with her thoughts:

[W]e need a fundamental shift away from the rules and complex accounting standards we currently use in the United States. The move to International Financial Reporting Standards would certainly help. IFRS is based more on principles and concepts, and while some people worry that these are “lesser” standards than U.S. GAAP, I believe that we will see more transparency about choices, options, and assumptions through enhanced disclosure under IFRS…

Perhaps the audit opinion should be less boilerplate to allow the auditors to provide more information and commentary. This could add needed transparency. Unfortunately, the litigious environment in which we operate would make this a risky proposition.

We like these ideas but more information and commentary would mean…more professional judgment! Hopefully the PCAOB would be okay with that idea because the trend seems to be that auditors can’t be trusted to do their jobs.

Dixon Hughes will close GSO site, shift staff to H.P. [Triad Business Journal]
Dixon Hughes is the latest firm to pull up the stakes in Greensboro, North Carolina. What is going on down there?

Jones Soda Announces Change of External Audit Firm [Market Wire]
Organic soda company drops Deloitte. Peterson Sullivan will take it from here.

AICPA Submits Comment Letter on IRS PTIN Proposal [Journal of Accountancy]
The AICAP submitted a letter to the IRS re: the proposed reg that would, among other things, require Preparer Tax Identification Numbers (PTIN) for tax professionals that don’t sign the returns. T

he AICPA isn’t so thrilled with this idea, and the JofA reports some of their thoughts, “(1) a successful implementation of registration and use of PTINs, along with the imposition of Circular 230 on all preparers should be sufficient to address unethical and/or incompetent tax return preparation and provide tremendous gains to tax administration in general; (2) it may cause confusion among taxpayers about the relative qualifications of tax return preparers; and (3) the additional burdens to the tax preparers and pass through of these costs to the taxpaying public should be considered.”